Biotech industry jobs up, while total employment rate dips

As Washington state’s overall employment rates have spiraled downward in the past four years, the life sciences industry has experienced significant, steady job growth, according to a study issued Nov. 18 that reexamines how biotech jobs are classified.

“You see roughly almost 9 percent growth since 2007, and about a 3 percent decline in the rest of the state’s private sector,” said Chris Rivera, president of the Washington Biotechnology and Biomedical Association (WBBA), the state’s trade group for the life sciences industry. “I think it continues to be an economic bright spot and hopefully one of our future drivers for our Washington economy going forward.”

The WBBA commissioned the Washington Research Council to produce the report, which found that the state’s life sciences industry generated $10.4 billion of GDP and $6.6 billion of personal income in the state, according to the report. (Washington’s total 2011 GDP was $340 billion.)

The life sciences industry in Washington state has the most growth potential in the areas of domestic health care, global health and sustainable biofuels, the report said. And it pays well: On average, bioscience jobs paid $32,366 more than the average annual wage in the U.S. private sector, according to the report.

Kriss Sjoblom, lead economist of the study, attributes the region’s success to a few things. For one, money from the federal government for research grants and other funding didn’t fall off during the recession; it was actually bolstered by the stimulus package. But that funding isn’t guaranteed in the long term.

Another factor is that people who invest capital in life sciences don’t expect immediate results. Big payoffs are expected to take years, even decades.

“In the automobile industry, when the economy goes in the tank, people stop buying cars and they start laying off employees,” Sjoblom said. “In life sciences, what you see is a lot of research and development on future products. Whether the economy is in the dumps today doesn’t matter to them. They’re not looking at stuff they want to sell today. They’re looking at things they want to sell in the future.”

WBBA commissioned the report to gauge the strength of the industry. The report found that the biotech industry directly employed 33,500 people in the state in 2010 and estimated that it supported another 57,000 secondary (nonscience) jobs throughout the state’s economy. That count would place the life sciences industry significantly ahead of computer and technology product manufacturing (including companies such as Cray Inc.), which provided nearly 19,000 direct jobs in 2010.

The Research Council used a new methodology that it said captures a more realistic picture of job growth and economic development in the diverse biotech industry.

Economists reached new numbers by expanding the definition of the industry and counting more jobs, including agriculture life science jobs, along with people working in research at testing labs, medical labs and diagnostic centers, Sjoblom said.

Biotechnology jobs across various fields “don’t naturally appear aggregated together in the employment statistics we see,” Sjoblom said. “But taken all together, it is a major industry. And it’s an industry that pays pretty well. The average wage is higher than the statewide average, and it’s a major contributor to personal income and the measure of economic activity in the state.”

Anneliese Vance-Sherman, a regional labor economist for the state’s Employment Security Deparment, didn’t have access to all of the data used to reach the numbers in the report, but she observed that the new report identified some of the challenges that labor economists deal with when tracking the life sciences industry.

“With any kind of emerging technology, we face the difficulty of how to categorize it,” Vance-Sherman said. “Because new technologies kind of bubble up organically. They don’t usually emerge in one type of job or one type of industry. They’re hard to measure.”

The old method for counting those jobs would have indicated the industry directly employed only 27,265 people in March 2010. That would still be a 8.5 percent increase compared to January 2007, when the life sciences industry had 25,131 direct jobs, according to the old methodology.

Still, Washington is not among the top regions for the life sciences nationally: It’s behind Massachusetts, the San Francisco Bay Area and New Jersey. The report describes the state as in the top of the second tier for biotechnology.

The industry’s biggest obstacles in Washington are limited capital availability, anticipated cuts in National Institutes of Health funding (considering current federal budget problems), and limitations in the pipeline of training people in bioscience — particularly in K-12 math and science. The key to becoming more competitive nationally will be recruiting and attracting talent.

Rivera, of the WBBA, said the industry, along with state political leaders, should heed the recommendations outlined in the report, which focus on ensuring that the state’s universities, research institutions and businesses have a work force that can meet the industry’s needs.

“We can’t take it for granted,” he said. “We can’t just assume this is going to be here forever, because there are other states and other countries that are investing significantly; they would love to have what we have right now.”